More From Brett Arends

Wimbledon has been the scene of sports history for more than a century. This year's tournament is living up to the tradition. Away from the turf, it is also making a small piece of financial history as well. The All-England Lawn Tennis Club in southwest London, which has hosted the tournament since 1877, is also hosting one of the biggest and most bizarre bond manias in the world.

Since the 1920s, the club has partially financed itself by issuing five-year debentures, or bonds. The money has gone to develop the club's facilities, including most recently the retractable roof that has at long last shielded Center Court from England's summer rain.

These bonds, however, come with a twist. The annual coupons are paid, not in pounds sterling, but in a more formidable currency: tickets to the tennis tournament itself. Each debenture entitles the holder to a ticket for each day of the two-week championships. You can buy debentures for Center Court seats, or for the adjacent Number One court.

The bonds are traded in the City of London, and prices recently have skyrocketed. Michael Dyson, who handles transactions at brokerage firm Investec, says Center Court bonds most recently changed hands at £66,000 ($103,000) each. That is more than twice the $43,000 price they were issued at just a couple of years ago, he notes. Furthermore, the bonds have just four years left (including this summer's tournament) of their five-year life.

Investors these days need no reminder that bonds have rocketed worldwide, with a corresponding collapse in yields. Five-year bonds issued by the U.S. and British Treasury departments each yield just 0.7 percent. But even by these standards Wimbledon bonds must be deemed extreme. The "yield to maturity" on the bonds -- the standard measure of value in fixed income -- is negative.

Wimbledon debentures attract tennis fans, and businesses wanting to impress clients with a day at the tournament. Tickets for the Wimbledon championships are hard to come by. Center Court, home of the biggest games, seats about 15,000. Members of the All-England club are each guaranteed a seat, but in addition to past champions and other honorary members there are only 375 regular members: The waiting list is so long, says club spokesman Jon Friend, that people joke that "the easiest way to become a member is to win the tournament."

Most of the rest of the seats are assigned by means of a public ballot held every year. The ballot is heavily oversubscribed. Tickets cannot be sold or transferred to another person.

That means any outsider who wants to guarantee a seat either needs to invest in a debenture, or to buy tickets from a debenture holder. (Debenture holders, unlike ballot winners, are allowed to sell their tournament tickets.) There are 2,500 Center Court debentures, and 1,000 for Number One court. Anyone can buy a debenture, so long as they have the money and someone wants to sell, and each one guarantees a seat. The debentures are sold in pairs. The most recent debentures provide seats for the tournaments from 2011 through 2015 inclusive.

What is the value of such a bond? It's possible to perform some simple calculations.

Someone who bought them at issue would receive tickets to the tournaments of 2011 through 2015, and a small sum -- $3,100 -- at the end. Someone who bought them earlier this year would have received tickets to this year's tournament and the next three.

Those tickets have a cash value. In recent years, debenture holders who sold their tickets through the club's official market have realized about $11,000 each year. Those who have gone to outside agencies have made more: Sources say around $16,000 a year.

These prices are astonishingly resilient. The official prices recorded by the club saw no downturn at all in the financial crisis of 2008.

A debenture that costs $103,000, pays out $16,000 for four years, and returns $3,100 at the end, offers a yield to maturity of minus 20%. If the tickets fetch just $11,000 a year, it will have produced a yield of minus 33%. By such standards even five-year inflation-protected U.S. Treasury bonds, which are guaranteed to lose 1% of your purchasing power each year, seem a positive bargain.

What is the explanation for the price of these bonds? Investec's Mr. Dyson, who has handled the trade in Wimbledon bonds for nearly twenty years, offers two. The first is scarcity. "They are very small issues," he says. "There are always a lot of inquiries, but they trade quite rarely." Mr. Dyson says he trades just twelve to fifteen pairs of debentures a year.

The second is that the debentures come with a rider: the right to subscribe to the club's next debenture issue. "People are taking a long-term view," suggests Mr. Dyson. "They're not just looking at it over five years, they would hope to renew." The All-England Club says new debenture issues are generally oversubscribed. And participating is typically valuable. Someone who bought into the most recent debenture at the issue price will likely earn an annual yield over the life of the bond of about 16 to 20%.

If I held Wimbledon debentures right here I'd be sorely tempted to sell. Even great tennis wouldn't tempt me to earn a negative return on investment.

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